Pacific Potash May Face Cancellation of Mining Rights in Brazil over Tax Debt

Mining.com reported that Canadian Pacific Potash Corporation (TSXV:PP) might risk the  cancellation of its mining rights in Brazil over the non-payment of about US$2.1 million (R$6.86 million Brazilian Real) to the country’s National Department of Mineral Production (DNPM).

As quoted in the market news:

The Vancouver-based miner said in a statement late Monday it did not receive the funds wired to its offices in Brazil for unknown reasons, which caused the firm to miss a tax payment due to the country’s National Department of Mineral Production (DNPM).

As a consequence, the company added, its mining rights for its Amazonas project in the country, one of the largest consumers of the fertilizer ingredient, may be revoked.

Brazil is a key market for the potash sector as the country imports the vast majority of the fertilizers it needs. This creates a significant opportunity for domestic producers with lower transport costs, such as Pacific Potash. While the country has 30 percent of the world’s arable land, the soil in Brazil is naturally potassium deficient, and all the major crops it grows require substantial amounts of potash.

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